Correlation Between Creative Media and G City
Can any of the company-specific risk be diversified away by investing in both Creative Media and G City at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Creative Media and G City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creative Media Community and G City, you can compare the effects of market volatilities on Creative Media and G City and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Creative Media with a short position of G City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creative Media and G City.
Diversification Opportunities for Creative Media and G City
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Creative and GZTGF is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Creative Media Community and G City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G City and Creative Media is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Creative Media Community are associated (or correlated) with G City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G City has no effect on the direction of Creative Media i.e., Creative Media and G City go up and down completely randomly.
Pair Corralation between Creative Media and G City
Given the investment horizon of 90 days Creative Media Community is expected to under-perform the G City. But the stock apears to be less risky and, when comparing its historical volatility, Creative Media Community is 1.33 times less risky than G City. The stock trades about -0.1 of its potential returns per unit of risk. The G City is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 401.00 in G City on September 2, 2024 and sell it today you would lose (26.00) from holding G City or give up 6.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.28% |
| Values | Daily Returns |
Creative Media Community vs. G City
Performance |
| Timeline |
| Creative Media Community |
| G City |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Creative Media and G City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creative Media and G City
The main advantage of trading using opposite Creative Media and G City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creative Media position performs unexpectedly, G City can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in G City will offset losses from the drop in G City's long position.| Creative Media vs. Douglas Emmett | Creative Media vs. Vornado Realty Trust | Creative Media vs. Highwoods Properties | Creative Media vs. Piedmont Office Realty |
| G City vs. New World Development | G City vs. Gaucho Group Holdings | G City vs. Henderson Land Development | G City vs. Creative Media Community |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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